Capital Allowances Act 2001 section 212S

Transactions on relevant day

Section 212S restricts who may claim capital allowances on plant and machinery that is transferred on the relevant day, where that transfer would otherwise reduce the relevant tax written-down value (RTWDV).

• The section applies where plant and machinery is transferred on the relevant day and the transfer would reduce the RTWDV calculated under section 212K (ignoring subsection 4(c) of that section).
• Once such a transfer takes place, only the original parties to the avoidance arrangement — referred to as C (the company) or P (the purchaser) — may claim capital allowances on the transferred plant and machinery.
• No other person who acquires the plant and machinery through the transfer is entitled to claim any allowance in respect of it after the transfer.
• The provision acts as an anti-avoidance measure, preventing allowance entitlements from being shifted to third parties through transactions timed to coincide with the relevant day.